{"id":6059,"date":"2016-10-28T19:42:17","date_gmt":"2016-10-29T00:42:17","guid":{"rendered":"https:\/\/www.institutionalinvestorsecuritiesblog.com\/?p=1177"},"modified":"2022-05-19T08:47:52","modified_gmt":"2022-05-19T13:47:52","slug":"american-capital-reit-accused-charging-hundreds-millions-dollars-excessive-fees","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/american-capital-reit-accused-charging-hundreds-millions-dollars-excessive-fees\/","title":{"rendered":"American Capital REIT is Accused of Charging Hundreds of Millions of Dollars in Excessive Fees"},"content":{"rendered":"

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A class action securities case <\/a>brought by stockholders is accusing\u00a0American Capital Agency Corp. of charging excessive management fees that were given to directors and executive officers as compensation. The real estate investment trust invests in agency mortgaged backed securities \u201con a leveraged basis.\u201d Because of this, American Capital must pay 90% of profits to investors as dividends.<\/span><\/div>\n
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However, according to William Wall, the lead plaintiff in the REIT case, a number of the individual defendants \u00a0\u201cimproperly funneled\u201d millions of dollars that should have gone to AGNC stockholders. He said that the REIT\u2019s board allegedly forced the company to pay the AGNC Manager \u201cexorbitant\u201d fees in light of the management agreement between the AGNC Manager and AGNC. The fees went to the defendants.\u00a0<\/span><\/div>\n
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Noting that the REIT\u2019s dividend is a key metric for its success, the class action securities complaint said that in 2012 the board cut AGNC\u2019s dividend by over 50%. The plaintiff said that the board had the contractural right to either end the unfair management agreement or make the AGNC Manager charge fees that were fairer. Instead, \u00a0AGNC allegedly kept paying the manager over $100M annually even though results were \u201cabysmal.\u201d<\/span><\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/blockquote>\n

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  A class action securities case brought by stockholders is accusing\u00a0American Capital Agency Corp. of charging excessive management fees that were given to directors and executive officers as compensation. The real estate investment trust invests in agency mortgaged backed securities \u201con a leveraged basis.\u201d Because of this, American Capital must pay 90% of profits to […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[3759,3741],"tags":[3695],"class_list":["post-6059","post","type-post","status-publish","format-standard","hentry","category-reits","category-securities-fraud","tag-american-capital-agency"],"yoast_head":"\nAmerican Capital REIT is Accused of Charging Hundreds of Millions of Dollars in Excessive Fees — Investor Lawyers Blog — October 28, 2016<\/title>\n<meta name=\"description\" content=\"  A class action securities case brought by stockholders is accusing\u00a0American Capital Agency Corp. of charging excessive management fees that were — October 28, 2016\" \/>\n<meta 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